Social trading is a form of investing that allows traders to copy and mirror trades from more experienced traders. In this article, you’ll learn everything you need to know about social trading. You’ll also uncover the 3 best social trading platforms. Social trading offers a world of new trading opportunities that allow you to learn from expert traders. We’ll start with the in’s and out’s of social trading so you can become familiar with the features of the best social trading platforms to use in your own practice.
If this is your first time on our website, our team at Trading Strategy Guides welcomes you. Make sure you hit the subscribe button, so you get your Free Trading Strategy every week directly to your email.
Most people look at Forex social trading as a technology that only allows them to copy trade. However, social network trading goes beyond copying real-time Forex trades. It allows you to learn new strategies and get trading ‘tips and tricks’ from more experienced traders.
In the financial world of trading, a social trading platform can help you improve your chances of ‘winning’ and become a better trader.
Let’s learn more about social network trading and all of its benefits.
Social Trading: What is a Social Trading Platform?
A social trading platform is an online community for traders. Social trading networks for forex and other instruments allow traders to connect, learn and share new trading ideas. This allows users to educate themselves, and potentially copy other users’ trades directly into their own brokerage trading accounts.
How does social trading work?
In the next section, you will learn how to social trade the forex market. Forex social trading is pretty easy to understand. First, you’ll need to select one of the best social trading platforms that allow copy trading. The best social trading platforms have forums where traders share their strategies, trading ideas, and historical performance. Once you find a profitable trader with a good track record, you can start duplicating their trading operations with a few clicks.
Select the most profitable Forex trading strategies from one of the leading Forex traders to your investment portfolio. The social trading platform will then monitor all trading activities of traders to which you select to copy trade. This is all done in real-time.
The trades taken by these professional traders will be also executed automatically in your brokerage trading account.
Take this, for example, assume a trader opened a long EUR/USD trade. The exact same trade will be automatically replicated on your account. It’s rare that you will have the same account balance as the trader you try to copy. The best social trading platforms will come with features to help you scale your bids so you won’t go over budget.
Next, depending on your risk tolerance you can select to copy trades using a fixed amount regardless of the initial position size opened in the copied account. Alternatively, you can opt to open trades proportionally to your account balance. This way you maintain the same level of risk as the copied account.
If a trader opens a trade worth $10,000 and your account balance is two times less than the trade which is executed, your account will be worth $5,000. If you open trades proportionally to your account balance if the copied trader profits $1,000 then you’ll profit $500. The gains will always be proportional.
Now let’s take a look at why you should consider using Forex social trading.
See the main benefits of social trading below:
Earning Passive Income
The first benefit of social trading is the opportunity to earn some passive income while you’re still learning the in’s and out’s of the trade game. You can start making profits from trading before you gain the necessary experience to sustain trading activities on your own.
Another benefit, even if you’re already a professional trader, is that a social network platform can allow you to earn additional profits and follow new trading ideas.
Quick Access to Reliable Trading News
Social network trading can simplify the process of searching for reliable trading news and information. Twitter is a great example of a social trading platform where you can get real-time and quick access to all sorts of data. Twitter is a great networking platform because it connects traders and allows them to learn from seasoned traders.
Nowadays, Twitter is one of the most popular social platforms for active traders. Twitter is very versatile because you can discuss your favorite trading stocks or currency pair. Follow the breaking news that can disrupt the market volatility and many new trading ideas.
Building a Trading Community
Being a trader can be a lonely business, so a social trading platform can resolve this issue. Joining social trading platforms is an excellent way to make new friends within the trading community.
Surrounding yourself with other traders can open the door for learning new trading tricks and strategies. It’s also easier to stay motivated when you surround yourself with quality and professional traders.
Let’s take one step forward and see where you can find the best social trading platform.
Best Social Trading Platforms
A social trading platform is a place where users can share and access each other’s trading activity. The best social trading platform should provide you with a wide selection of traders that have mastered the game of trading and are able to generate profits in the long run.
Based on their performance you can then pick out the most promising and profitable traders and copy their trades.
If you don’t know which social trading network to choose here are our top 3 best social trading platforms:
If you’re looking to make money in the FX world, but you really don’t know how to do it, you can go to Zulutrade. They will facilitate communication between you and a profitable trader. ZuluTrade allows you to see how their strategy looks like and how it performs.
ZuluTrade was one of the first trade copy services. They are without a doubt one of the biggest copy trading networks. Among other features, ZuluTrade also offers binary options social trading.
What differentiates Zulutrade from other social trading networks is the ability to create your own set of rules. You can opt to close trades early to lock in profits, to update the stop loss and take profit order based on your own risk tolerance. Or you can simply notify you when a new trade is triggered.
Our second choice is Myfxbook which is mostly known for being a third trustworthy party to share your track record. This social trading network also offers a mirror trading service that allows you to copy trades from your favorite trader directly into your account.
Myfxbook also provides a feature that allows you to link multiple trading accounts under a single personal profile. This, in turn, allows you to better organize and manage your trading statistics.
Collective2 is a multi-asset social platform that tracks the real-time performance of independent traders. The platform works the same like ZuluTrade: you can subscribe to the top performers and automatically trade the same way in your personal account.
What differentiates Collective2 from other social trading platforms is the fact that you can trade any instruments (stocks, forex, futures, and options). You also have the option to decide how much risk you want to take with each trade. This flexibility will help you better control the performance of your account.
Conclusion – Forex Social Trading
In summary, Forex social trading can be an excellent way to generate a passive income. The flip side is that you need to do your own due diligence before picking up the traders you want to follow and copy their trades. As always, make sure you understand the risk involved with this practice and be wise with your hard-earned money.
If you’re already a successful trader, social network trading can provide an opportunity to earn more money by sharing with your other trades. A potential downside is that other people are counting on your trades to make a profit which can be a little stressful.
To successfully trade stocks, Forex or cryptocurrencies you don’t just need extensive experience, you have to be able to properly read price charts. We hope this guide helped clear up any questions you had about social trading strategies.
Thank you for reading!
Feel free to leave any comments below, we do read them all and will respond.
Also, please give this strategy a 5 star if you enjoyed it!
Please Share this Trading Strategy Below and keep it for your own personal use! Thanks, Traders!